Radio Advertising Costs: A Simple Guide to Ad Spend
Elizabeth Kraus has more than a decade of first-hand experience building and growing a boutique digital marketing agency and double that in small and mid-size business marketing management. She provides expert answers to marketing questions related to branding, content marketing, web development, email, social media, and SEO.
Radio advertising costs average from $200 to $5,000 per week depending on location, ad length, and the size of the listening audience. Producing radio commercials costs from $1,000 to $2,500 depending on inclusions like music, voice actors, and editing, but some stations have in-house resources to cut your costs. Learn more about what drives the cost of radio ads to find out whether it’s a good investment for your small business.
How Much a 30-second Radio Ad Costs by Location
As a guidepost for radio advertising costs, we used estimates from the experts at Gaebler. Not surprisingly (and similarly to TV advertising costs), the cost to run radio commercials is higher in larger, more competitive markets. In New York, NY, for example, the cost of a 30-second radio ad will be more than $1,400 while in Topeka, Kansas, running the same 30-second radio ad costs as little as $25.
While this sounds like a bargain, keep in mind that in addition to the cost of air time, advertising on the radio also entails the cost of producing ads. Plus, your advertising rate can increase dramatically depending on how many times per week you want your ad to run and on which shows. Running ads in the middle of the night when listenership is low will be less expensive than during popular drive-to-work shows, but will also reach far fewer people.
Traditional Radio Advertising Costs by City
City | Potential Reach in Millions | Number of Radio Stations | Radio Ad Cost Estimate (30-second Ad) |
|---|---|---|---|
New York, NY | 8.4 million | 38 | |
San Francisco, CA | 874 thousand | 44 | |
Atlanta, GA | 488 thousand | 56 | |
Chicago, IL | 2.7 million | 59 | |
Houston, TX | 2.3 million | 62 | |
Orlando, FL | 280 thousand | 20 | |
Cleveland, OH | 385 thousand | 17 | |
Denver, CO | 705 thousand | 31 | |
Raleigh, NC | 464 thousand | 29 | |
Las Vegas, NV | 634 thousand | 42 | |
Buffalo, NY | 256 thousand | 23 | |
Baton Rouge, LA | 224 thousand | 31 | |
Topeka, KS | 126 thousand | 12 |
(Source: Gaebler)
Traditional radio advertising is mainly local, which can limit your audience. Streaming radio advertising, on the other hand, offers a national or even worldwide audience segmented on listener interests rather than location. Advertising on internet-streaming radio shows allows you to target a much wider audience as listeners could be located anywhere in the world. However, as such, streaming radio ads can be more costly in comparison.
Streaming Radio Advertising Costs by Outlet
Streaming Service | Potential Reach | Radio Ad Cost | Minimum Cost |
|---|---|---|---|
270 million | 15 to 25 cents per ad served | ||
72 million | 30-60-second audio commercial | $10,000 per week and minimum $20,000 order | |
(via SXM Media) | 63 million | $5-$7 visual ads $15-$25 video ads $8-$12 audio ads (cost per thousand impressions, or CPM) | |
Over 100 million | 30 million online impressions | From $5,000-$30,000 per week |
Streaming radio advertising rates can fluctuate depending on the time of day as well as the popularity of shows and stations. In other words, you can’t simply divide the total cost by the number of ad spots to determine how much you are paying for each spot for a radio advertising campaign. It won’t be accurate because some times of the day are much more expensive than others. Holidays and special events can also influence radio ad pricing.
How to Calculate Radio Ad Costs per Spot
The general formula for calculating the cost of a radio ad is simple—it comes down to the number of listeners multiplied by the cost to reach 1,000 listens (CPM). However, as mentioned, the number of people listening to a radio station varies based on time of day, time of year, station, and program popularity. As a result, radio advertising costs cannot be calculated as a fixed rate.
What Is ‘Pricing per Spot’ in Radio Advertising?
Some radio stations offer pricing per spot, which allows you to purchase specific spots (or times) at a generally attractive price point. However, pricing per spot is generally used to secure ad placements during the times of the day (or night) when there are fewer listeners. Ads seem cheap, but only because you are reaching a fraction of the listener base of a prime-time audience.
For example, a spot that airs at 1 a.m. may have fewer than one-tenth of the listeners of a spot that airs at 1 p.m. With pricing per spot, a radio station can make the cost per spot sound very cheap, while you may be paying more per listener than if you paid to advertise during times with higher listenership. To ensure you’re getting full reach and the best bang for your ad budget, ask for the cost per thousand listeners, or CPM, of these spots as well.
Factors That Affect Radio Ad Spot Costs
Many factors can affect radio advertising costs, but most relate to listener demographics, competition, and how well an advertiser can work out a reasonable ad cost with a station. Below are the major elements that determine radio ad costs, such as how many people are listening during your time slot, audience demographics, demand for ads, and your ability to negotiate pricing.
Here are the significant factors that impact radio advertising costs:
- Clout: Bigger name radio stations and shows are going to yield higher-priced ad slots, and that goes for traditional radio commercials as well as the cost of streaming ads.
- Number of listeners: The more people who will likely hear your commercial, the more you can expect to pay.
- Demographics: Some target groups are more popular among advertisers than others. For example, expect to pay more for an audience of adults aged 25 to 54.
- Competition: It’s common to pay more for ads when many different advertisers want to run ads during the same time slots as you. This could occur, for example, during the holiday season when many retail stores are advertising sales.
- Negotiation: Stations will generate a pricing proposal, but this is not necessarily the final price. You may be able to negotiate the cost of radio ads down from 20% to 40% depending on your negotiation skills and the terms of your contract.
Keep in mind that not all radio ads are priced the same way. The final cost depends on the station’s policies, listeners, demand (competition) in a specific market, and other variable factors. For example, if there’s a popular event happening in your town, like a highly contested political election, the price for an ad spot will jump.
Radio Commercial Production Costs
In addition to what you’ll pay for air time is the cost of radio ad production. This can be minimal for those able to produce high-quality radio commercials in-house. On the other hand, it can cost from a few hundred to thousands for those who need to leave ad production in the hands of outside experts. If you’re not sure which one to use, opt for professional services to ensure high-quality ads engineered to produce the results you want.
Unless you have in-house production capabilities, there are two main avenues for producing radio commercials to build brand presence:
- Outsource ad production to a professional agency: This is the more expensive option, and outsourcing to an agency may cost anywhere from $350 to over $3,500. However, it could provide you with a higher-performing and higher-quality advertisement.
- Hire a freelance voice actor or script writer: You can script ads in-house and then hire professional voice talent to record your ad for you. This is a low-cost way of producing a radio ad and involves an investment of as little as $5 by using Fiverr. Likewise, if you need help writing a script, experienced Fiverr professionals can help.
Radio Advertising Cost Proposal Terminology
When it comes time to purchase a radio ad spot, your local radio station (or internet streaming service) will generate a cost proposal, often called a media buying proposal. The proposal will likely include an advertising rate chart showing specific costs as well as terms specific to radio commercials, which can make the proposal difficult to understand.
Because there are many words and terms that are unique to radio advertising, you want to understand them before agreeing to a price. To help, here’s a quick glossary for terms common in media buying proposals:
- Len: Length in seconds, or how long the radio ad is once produced (e.g., 60-second spot, 30-second ad, 15-second commercial, and so on)
- Spots: Number of times the commercial will run
- Rate: Cost per advertising spot
- Cost: Rate times the number of spots
- Average quarterly hour (AQH): The average number of persons listening to a particular station for at least five minutes during a 15-minute period
- Frequency (Freq): The average number of times the same person will hear a commercial
- Net reach: The number of different people reached in a given ad run
Example Radio Station Rate Chart
Sample radio station cost proposal for a 13-week time frame
Quick Stats About Radio Advertising in the U.S.
The radio advertising industry in the U.S. raked in nearly $15 billion in 2021 across about 15,500 radio stations and 272 million listeners. Though less than its pre-pandemic numbers, the industry is recovering and should top more than $16 billion by 2024.
Major national companies, such as Home Depot and Disney, are investing heavily in radio ads, but it’s not just for household brands. In fact, a majority of those advertising on traditional radio stations are local businesses, and 14% of small businesses set aside part of their advertising budgets for radio ads. Learn more about why small businesses promote themselves on the radio and about how to measure ad performance in our guide to radio advertising.
Frequently Asked Questions (FAQs)
How do you get the lowest radio advertising cost?
It’s nearly always possible to negotiate lower pricing for radio commercials. Using the ad rate card of the station as your baseline, ask for discounted rates, offer giveaways and contests, and consider non-peak times to save money. It’s also common to get discounts for buying ads in bulk, which can effectively generate brand awareness when marketing a new business.
What age group listens to the radio the most?
One of the more challenging aspects of radio advertising is the limited audience targeting capabilities, especially compared to alternatives like social media advertising. However, there’s still a lot of valuable data about radio audiences. For example, over 82% of Americans over the age of 12 listen to the radio each week, including over 87% of U.S. adults aged 35-64, 82% of U.S. adults from 18-49 years of age, and over 75% of 18-24 year olds.
What are the most popular alternatives to radio commercials?
Radio commercials offer an effective way to reach a broad local audience, but they aren’t the only means available to small businesses. Depending on your market, television ads and newspaper advertisements, among other marketing materials, could also help you reach a broad local audience. However, none offers the ability to target audiences with the precision of social ads or buyers based on search intent than when you advertise on Google.
Bottom Line
How much radio ads cost varies depending on several factors, but is generally calculated based on the number of listeners multiplied by a station’s price per 1,000 listens. However, pricing is usually negotiable and needs to be considered alongside the cost of radio ad production to determine if it’s an effective ad strategy for your business.
For low-cost voice talent, ad production, and radio script writing, we recommend Fiverr. Experienced radio commercial services are available starting as low as $5 per project.
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